[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR435.2]

[Page 433-434]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 435_MAIL OR TELEPHONE ORDER MERCHANDISE--Table of Contents
 
Sec. 435.2  Definitions.

    For purposes of this part:
    (a) Mail or telephone order sales shall mean sales in which the 
buyer has ordered merchandise from the seller by mail or telephone, 
regardless of the method of payment or the method used to solicit the 
order.
    (b) Telephone refers to any direct or indirect use of the telephone 
to order merchandise, regardless of whether the telephone is activated 
by, or the language used is that of human beings, machines, or both.
    (c) Shipment shall mean the act by which the merchandise is 
physically placed in the possession of the carrier.
    (d) Receipt of a properly completed order shall mean, where the 
buyer tenders full or partial payment in the proper amount in the form 
of cash, check, money order, or authorization from the buyer to charge 
an existing charge account, the time at which the seller receives both 
said payment and an order from the buyer containing all of the 
information needed by the seller to process and ship the order. 
Provided, however, That where the seller receives notice that the check 
or money order tendered by the buyer has been dishonored or that the 
buyer does not qualify for a credit sale, receipt of a properly 
completed order shall mean the time at which:
    (i) The seller receives notice that a check or money order for the 
proper amount tendered by the buyer has been honored,
    (ii) The buyer tenders cash in the proper amount, or
    (iii) The seller receives notice that the buyer qualifies for a 
credit sale.
    (e) Refund shall mean:
    (1) Where the buyer tendered full payment for the unshipped 
merchandise in the form of cash, check or money order, a return of the 
amount tendered in the form of cash, check or money order;
    (2) Where there is a credit sale:

[[Page 434]]

    (i) And the seller is a creditor, a copy of a credit memorandum or 
the like or an account statement reflecting the removal or absence of 
any remaining charge incurred as a result of the sale from the buyer's 
account;
    (ii) And a third party is the creditor, a copy of an appropriate 
credit memorandum or the like to the third party creditor which will 
remove the charge from the buyer's account or a statement from the 
seller acknowledging the cancellation of the order and representing that 
it has not taken any action regarding the order which will result in a 
charge to the buyer's account with the third party;
    (iii) And the buyer tendered partial payment for the unshipped 
merchandise in the form of cash, check or money order, a return of the 
amount tendered in the form of cash, check or money order.
    (f) Prompt refund shall mean:
    (1) Where a refund is made pursuant to paragraph (e) (1) or (2)(iii) 
of this section, a refund sent to the buyer by first class mail within 
seven (7) working days of the date on which the buyer's right to refund 
vests under the provisions of this part;
    (2) Where a refund is made pursuant to paragraph (e)(2) (i) or (ii) 
of this section, a refund sent to the buyer by first class mail within 
one (1) billing cycle from the date on which the buyer's right to refund 
vests under the provisions of this part.
    (g) The time of solicitation of an order shall mean that time when 
the seller has:
    (1) Mailed or otherwise disseminated the solicitation to a 
prospective purchaser,
    (2) Made arrangements for an advertisement containing the 
solicitation to appear in a newspaper, magazine or the like or on radio 
or television which cannot be changed or cancelled without incurring 
substantial expense, or
    (3) Made arrangements for the printing of a catalog, brochure or the 
like which cannot be changed without incurring substantial expense, in 
which the solicitation in question forms an insubstantial part.

[58 FR 49121, Sept. 21, 1993, as amended at 60 FR 56950, Nov. 13, 1995]